ECB on alert as inflation threat lurks
The post ECB on alert as inflation threat lurks appeared on BitcoinEthereumNews.com. The European Central Bank (ECB) is watching inflation risks closely. Governing Council member Peter Kazimir warns that the path to stable prices is still uncertain despite progress. The ECB kept interest rates unchanged last week for the second time in a row, showing confidence that inflation is close to its 2% goal but admitting it must stay flexible in a changing global economy. Kazimir urges the ECB to stay watchful of inflation Peter Kazimir warned the European Central Bank not to ignore the possibility of rising inflation just because the economy’s progress shows prices are slowly moving closer to its target of 2%. He called the current interest rates “comfortable, neutral territory,” meaning the bank must prepare to react to sudden changes because the global economy remains unpredictable. Kazimir’s comments come when the ECB’s latest quarterly forecasts showed that inflation will stand at 1.9% in 2027. This is just below the 2% target. While the numbers may seem reassuring, some policymakers warn that the region could be stuck with slower growth and lower confidence if inflation stays below the target for several quarters. This would force companies to change how they charge for their goods and services, force workers to accept smaller wage increases, and weaken the overall economic demand. On the other hand, Kazimir insists that if the ECB focuses only on the risk of inflation being too low, it won’t act in time when prices start rising too fast to keep up with. Even with this ongoing debate, Kazimir said the small and temporary surges in inflation are unavoidable in an open and interconnected economy. For these reasons, the ECB should not change policy every time inflation moves slightly above or below the target. He added that reacting to these “small, tiny deviations” would only confuse markets and…
The post ECB on alert as inflation threat lurks appeared on BitcoinEthereumNews.com.
The European Central Bank (ECB) is watching inflation risks closely. Governing Council member Peter Kazimir warns that the path to stable prices is still uncertain despite progress. The ECB kept interest rates unchanged last week for the second time in a row, showing confidence that inflation is close to its 2% goal but admitting it must stay flexible in a changing global economy. Kazimir urges the ECB to stay watchful of inflation Peter Kazimir warned the European Central Bank not to ignore the possibility of rising inflation just because the economy’s progress shows prices are slowly moving closer to its target of 2%. He called the current interest rates “comfortable, neutral territory,” meaning the bank must prepare to react to sudden changes because the global economy remains unpredictable. Kazimir’s comments come when the ECB’s latest quarterly forecasts showed that inflation will stand at 1.9% in 2027. This is just below the 2% target. While the numbers may seem reassuring, some policymakers warn that the region could be stuck with slower growth and lower confidence if inflation stays below the target for several quarters. This would force companies to change how they charge for their goods and services, force workers to accept smaller wage increases, and weaken the overall economic demand. On the other hand, Kazimir insists that if the ECB focuses only on the risk of inflation being too low, it won’t act in time when prices start rising too fast to keep up with. Even with this ongoing debate, Kazimir said the small and temporary surges in inflation are unavoidable in an open and interconnected economy. For these reasons, the ECB should not change policy every time inflation moves slightly above or below the target. He added that reacting to these “small, tiny deviations” would only confuse markets and…
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